(Reuters) - The Justice Department is pressing for divestitures at airports throughout the United States as a condition for dropping a lawsuit aimed at stopping a proposed merger of US Airways and American Airlines, U.S. Attorney General Eric Holder said on Monday.

Holder said that talks with the companies, whose merger would create the world's largest airline, were ongoing and that he hoped for an agreement before a trial begins on November 25.

"What we have tried to focus on is to make sure that any resolution in this case necessarily includes divestitures of facilities at key constrained airports throughout the United States," Holder said at a press conference.

"We hope that we will be able to resolve this short of trial but if we do not meet those demands that we have, we are fully prepared to take this case to trial," said Holder. "We will not agree to something that does not fundamentally resolve the concerns that were expressed in the complaint."

Shares of AMR Corp, parent of American Airlines rose 20 percent and shares of US Airways rose 4.5 percent after Holder's remarks.

In a complaint filed in August aimed at stopping the proposed deal, Justice focused on Reagan National Airport outside Washington. The two carriers control a combined 69 percent of takeoff and landing slots at the airport.

In its complaint, the federal government also listed more than 1,000 city pairings where the two airlines dominate the market and where a merger could conceivably drive up prices or cut the number of flights.

US Airways declined comment on Holder's remarks. American Airlines could not immediately be reached for comment.

Not really a retreat IMO. My guess is that DoJ asked for concessions and AA/US said no, figuring that DoJ would approve anyways. DoJ called their bluff. Now AA/US have to cede some slots to improve competition over what it would have been without that and the DoJ can say they did their job.

M7VO,
Thank you for posting! The Reuters article is an interesting point of view of "reading the tea leaves" about the AA/US potential merger.
I've often thought that the DOJ objections were based upon any impact that could occur at DCA, where our nation's politicians (to say nothing of the legions of lobbyists) are used to flying in and out of, and don't want anything to substantially change. And I'm sure that Milepointers with status in AA and US are following these events closely. I certainly am!
Newscience

Not really a retreat IMO. My guess is that DoJ asked for concessions and AA/US said no, figuring that DoJ would approve anyways.

Click to expand...

Maybe DoJ was just posturing earlier, when they released Doug Parker's own emails as their evidence. Their arguments then were that consolidation at this point in the industry is not only theoretically anti-competitive, but it was the specific intent of the deal. The alleged threat was systemic, not limited to one or two markets.

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